Five-star Business Finance Limited · NSE:FIVESTAR
Five-star Business Finance — Q3 FY2025 Earnings Presentation
58 slides from Five-star Business Finance's earnings presentation, January 2025
Slide 1: Five-Star Business Finance Limited Investor Presentation Q3FY2025
Reaching the Unreached Five-Star Business Finance Limited Investor Presentation | Q3FY2025 STRICTLY PRIVATE AND CONFIDENTIAL
Slide 2: Safe Harbour
Safe Harbour Five-Star Business Finance Limited | Investor Presentation – Q3FY25 This presentation and the accompanying slides (the “Presentation”) which have been prepared by Five-Star Business Finance Limited (the “Company”) have been prepared solely for information purposes and do not constitute
Slide 3: Glossary
Glossary Five-Star Business Finance Limited | Investor Presentation – Q3FY25 ▪ All amounts are given in ₹ Million unless specified otherwise. ▪ Gross NPA or Gross Stage 3 assets represents loans which are more than 90 days past due (till the quarter ended Sep 2022); for the quarters post Sep 2022, t
Slide 4: Presentation Path
Presentation Path Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Executive Summary SECTION 1 SECTION 2 Business Updates Asset Quality & ECL SECTION 3 SECTION 4 Liability & ALM Financial Statements SECTION 5 SECTION 6 Company Overview 4
Slide 5: Executive Summary
EXECUTIVE SUMMARY
Slide 6: Executive Summary | Q3FY25
Executive Summary | Q3FY25 Five-Star Business Finance Limited | Investor Presentation – Q3FY25 q-o-q y-o-y Branches Loan Disbursement Loan Portfolio 729 ₹ 9,408 Mn ₹ 111,781 Mn +69 +249 -25% -22% +2% +25% Gross NPA 30+ DPD Profit After Tax 1.62% 9.16% ₹ 2,739 Mn +15 bps +22 bps +72 bps +81 bps +2% +
Slide 7: Executive Summary | 9MFY25
Executive Summary | 9MFY25 Five-Star Business Finance Limited | Investor Presentation – Q3FY25 y-o-y Branches Loan Disbursement Loan Portfolio 729 ₹ 35,097 Mn ₹ 111,781 Mn +249 -1% +25% Gross NPA 30+ DPD Profit After Tax 1.62% 9.16% ₹ 7,934 Mn +22 bps +81 bps +32% Net Interest Margin Return on Asset
Slide 8: Q3FY25 Performance – At a glance
Q3FY25 Performance – At a glance Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Scale of Distribution Granular Book Asset Quality Liability Profile Profitability Operations ₹111.8bn / ₹89.3bn 729 100% Secured 1.62% 46 ₹2.7bn / ₹2.2bn AUM in Q3FY25 / Q3FY24 Number of Branches Loa
Slide 9: Strong Financial Performance over the years
Strong Financial Performance over the years Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Particulars (₹ Mn) FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 I-GAAP I-GAAP I-GAAP I-GAAP IND-AS IND-AS IND-AS IND-AS IND-AS IND-AS Operational Information Numbe
Slide 10: Distinguished Board of Directors
Distinguished Board of Directors Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Promoter Director Lakshmipathy Deenadayalan Chairman & Managing Director Independent / Non- Executive Directors Anand Raghavan T T Srinivasaraghavan Bhama Krishnamurthy Select other Directorships Shr
Slide 11: Profile of Board of Directors
Profile of Board of Directors Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Anand Raghavan T T Srinivasaraghavan Lakshmipathy Deenadayalan Independent / Non-Executive Director Independent / Non-Executive Director Chairman & Managing Director Chairperson – Audit Committee Chairp
Slide 12: Experienced Management Team
Experienced Management Team Five-Star Business Finance Limited | Investor Presentation – Q3FY25 22 22 21 9 22 9 22 7+ Lakshmipathy Deenadayalan Rangarajan Krishnan Srikanth Gopalakrishnan Vishnuram Jagannathan Chairman & MD JMD & CEO JMD & CFO Chief Operating Officer Education: Bachelor of Engineeri
Slide 13: Business Updates
BUSINESS UPDATES
Slide 14: Business Updates (1/2)
Business Updates (1/2) Five Star Business Finance Limited | Investor Presentation – Q3FY25 Operations 1. Net Q-o-Q AUM growth of ₹2,509 Mn in Q3FY25 as against ₹6,664 Mn in Q3FY24. AUM was up 25% Y-o-Y at ₹111,781 Mn as of December 31, 2024 as against ₹89,308 Mn as of December 31, 2024. 2. Disbursem
Slide 15: Business Updates (2/2)
Business Updates (2/2) Five Star Business Finance Limited | Investor Presentation – Q3FY25 Liabilities 1. In Q3FY2025, the company received sanctions for incremental debt of ₹14,000 Mn, availing ₹10,450 Mn (inclusive of some unavailed sanctions from previous quarters),at a weighted average rate of 9
Slide 16: Balance Sheet Indicators
Balance Sheet Indicators Five Star Business Finance Limited | Investor Presentation – Q3FY25 Quarterly Data Last 5 years data All amounts in ₹ Mn Disbursements AUM Net Worth Disbursements 25% 21% 48,814 (22%) 60,171 1,09,272 1,11,781 57,233 33,914 12,089 12,507 89,308 49,562 24,087 9,408 17,562 2% 5
Slide 17: P&L Indicators
P&L Indicators Five Star Business Finance Limited | Investor Presentation – Q3FY25 Quarterly Data Last 5 years data All amounts in ₹ Mn Income Interest Expense Other Expenses Income 28% (21%) (33%) 21,951 7,311 1,627 1,713 7,058 1,714 1,631 1,412 15,289 5,700 12,562 1,287 10,513 7,873 (5%) (5%) 4% Q
Slide 18: Consistent & Best-in-class Spreads
Consistent & Best-in-class Spreads Five Star Business Finance Limited | Investor Presentation – Q3FY25 Portfolio Yield Cost of borrowing Spread 24.50% 24.19% 24.24% 24.22% 24.18% 12.00% 25.00% 14.00% 24.19% 24.50% 24.16% 24.18% 24.17% 24.23% 24.27% 13.50% 24.00% 23.98% 24.05% 11.50% 24.00% 13.00% 23
Slide 19: Well-diversified portfolio cuts
Well-diversified portfolio cuts Five Star Business Finance Limited | Investor Presentation – Q3FY25 AUM by Geography AUM by Ticket Size Q3FY25 1% 1% Q3FY24 Q3FY25 1% 0% Q3FY24 1% 0% 6% 5% 12% 6% 6% 11% 29% 32% 34% ATS for 38% 19% 20% ATS for Q3FY25 Q3FY24 3.43L 3.44L 50% 53% 38% 36% TN AP TS KA MP O
Slide 20: Asset Quality & ECL
ASSET QUALITY & ECL ' weil
Slide 21: Asset Quality Indicators (1/2)
Asset Quality Indicators (1/2) Five Star Business Finance Limited | Investor Presentation – Q3FY25 Collections Efficiency (%) 30+ (%) 8.35 9.16 8.11 8.44 7.89 1.62 1.40 1.41 1.47 1.38 99.1 97.5 99.5 97.8 98.5 97.2 98.4 97.0 98.0 96.7 6.95 6.71 6.98 7.54 6.51 Dec'23 Mar'24 Jun'24 Sep'24 Dec'24 Dec'23
Slide 22: Asset Quality Indicators (2/2)
Asset Quality Indicators (2/2) Five Star Business Finance Limited | Investor Presentation – Q3FY25 Amount in ₹ Mn As at Dec 2024 As at Sep 2024 As at Dec 2023 Bucket AUM % AUM AUM % AUM AUM % AUM Current (Stage-1) 94,922 84.92% 93,974 86.00% 77,434 86.70% 1-30 (Stage-1) 6,620 5.92% 6,071 5.56% 4,415
Slide 23: ECL Provisioning
ECL Provisioning Five Star Business Finance Limited | Investor Presentation – Q3FY25 Amount in ₹ Mn As of December 31, 2024 Stage 1 Stage 2 Stage 3 Total Loans Outstanding (Gross) 101,542 8,431 1,808 111,781 ECL Provision 384 562 907 1,853 Loans Outstanding (Net) 101,158 7,870 900 109,928 ECL Provis
Slide 24: Lag NPA
Lag NPA Five Star Business Finance Limited | Investor Presentation – Q3FY25 Amount in ₹ Mn Q3FY2025 Q3FY2024 Q3FY2023 Q3FY2022 Loan Portfolio 111,781 89,308 62,424 47,676 Gross Stage 3 assets 1,808 1,251 907 606 Gross Stage 3 assets % 1.62% 1.40% 1.45% 1.27% Gross Stage 3 assets % - 1 year Lag 2.02%
Slide 25: Liability & ALM
LIABILITY & ALM
Slide 26: Well-diversified Liability Franchise (1/2)
Well-diversified Liability Franchise (1/2) Five Star Business Finance Limited | Investor Presentation – Q3FY25 Liability franchise consists of a strong set of lenders who can support the company’s plans Number of lenders Lenders to the Company 11 Select Public State Bank of India | Bank of Baroda |
Slide 27: Well-diversified Liability Franchise (2/2)
Well-diversified Liability Franchise (2/2) Five Star Business Finance Limited | Investor Presentation – Q3FY25 Diversified borrowing mix across lender category and product category Borrowing exposure and Cost of borrowing Borrowings 31,785 42,473 43,167 48,193 57,911 63,158 67,239 68,795 73,625 outs
Slide 28: Cashflow Position as of Dec’24 – Cumulative
Cashflow Position as of Dec’24 – Cumulative Five Star Business Finance Limited | Investor Presentation – Q3FY25 No Cumulative mismatches in any of the time buckets Particulars Up to 1M 1-2 M 2-3 M 3-6 M 6M – 1Y 1-3 Y 3-5 Y >5 Y Opening Liquidity 22,745 22,310 22,541 21,529 21,340 21,690 23,249 44,03
Slide 29: Strong Liquidity Position as of Dec’24
Strong Liquidity Position as of Dec’24 Five Star Business Finance Limited | Investor Presentation – Q3FY25 Amount in ₹ Mn Liquidity buffer as of Dec 2024 Unencumbered cash & cash equivalents 21,447 Unavailed sanction from banks / FIs 6,000 Total Liquidity 27,447 Projected Cashflow Schedule Q4FY25 Q1
Slide 30: Financial Statements
FINANCIAL STATEMENTS
Slide 31: Balance Sheet
Balance Sheet Five Star Business Finance Limited | Investor Presentation – Q3FY25 Particulars (₹ Mn) Q3FY2025 Q3FY2024 Q2FY2025 Assets Cash & Cash equivalents 14,271 15,308 12,115 Bank balances other than cash & cash equivalents 3,347 1,361 1,195 Loans 112,330 88,887 110,010 - Loan portfolio 111,781
Slide 32: Profit & Loss Account
Profit & Loss Account Five Star Business Finance Limited | Investor Presentation – Q3FY25 Particulars (₹ Mn) Q3FY2025 Q3FY2024 Q2FY2025 Y-o-Y Q-o-Q 9MFY2025 9MFY2024 Y-o-Y Loan Portfolio 111,781 89,308 109,272 25% 2% 111,781 89,308 25% Interest Income (1) 7,112 5,495 6,793 29% 5% 20,316 15,173 34% -
Slide 33: RoE Tree
RoE Tree Five Star Business Finance Limited | Investor Presentation – Q3FY25 Particulars Q3FY2025 Q3FY2024 Q2FY2025 9MFY2025 9MFY2024 Interest Income (as a % of average portfolio) 23.98% 24.25% 24.18% 24.17% 24.29% Interest Expenses (as a % of average borrowings) 9.63% 9.64% 9.65% 9.64% 9.71% Net In
Slide 34: Company Overview
COMPANY OVERVIEW
Slide 35: Our Journey
Our Journey Five-Star Business Finance Limited | Investor Presentation – Q3FY25 2023 2005 – 2015 373 branches; ₹69bn AUM AA- rating BUILDING & Listing on the bourses STRENGTHENING PHASE 2020 252 branches; ₹39bn AUM Post COVID, back to A rating quality growth Strong portfolio growth 2014 Marquee PE i
Slide 36: Who we are
Who we are Five-Star Business Finance Limited | Investor Presentation – Q3FY25 NBFC providing secured financial solutions to Small Business customers and Self-employed Individuals who are largely cut-off from formal lending ecosystem Deep understanding of customer behavior and strong knowledge of ma
Slide 37: Current Shareholding
Current Shareholding Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Institutional Promoters Top Institutional Investors* (ex-PE and Promoter) Others 2.86% Investor name % stake** Individual Promoter 10.45% 18.38% Fidelity Investments 7.07% & Promoter Group AIF & QIB HDFC MF 4.23
Slide 38: Growth Opportunity & Levers (1/2)
Growth Opportunity & Levers (1/2) Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Large Market Opportunity to be served through multiple growth levers Large Market Opportunity Five Star Growth Strategy Fiscal 2024E MSME Credit Gap To address the large untapped market opportunity
Slide 39: Growth Opportunity & Levers (2/2)
Growth Opportunity & Levers (2/2) Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Growth Strategy shall be borrower led and not led by increase in ticket size 4,50,000 0.35 4,00,000 3,85,966 0.29 0.30 0.25 96.29% 3,50,000 0.25 0.27 0.24 0.25 3,00,000 84.22% COVID years where ther
Slide 40: Customer & Product
Customer & Product Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Well thought out customer & product strategies – helps us remain insulated even during periods of stress Customer Strategy Product Strategy Who are our customers – Small Business Owners and Self- Loan purpose – Lo
Slide 41: Distribution
Distribution Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Gradual growth in newer regions; significant ramp-up upon reaching the comfort state 729 branches | 10 States / UT State-wise portfolio break-up Normal branches – 589; Split branches – 140 No of State Q3FY25 FY24 FY23 F
Slide 42: Cluster Strategy – Ideal Branch Structure
Cluster Strategy – Ideal Branch Structure Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Evolution of Branch Structure at Five-Star Till FY2016 2017 – 2023 2023 till date… Normal Branch Strategy Super Branch Strategy Cluster / Ideal Branch Strategy 5-6 Relationship Officers Add
Slide 43: Robust Proprietary Underwriting (1/2)
Robust Proprietary Underwriting (1/2) Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Underwriting strategy fine-tuned over years of experience – to serve a “not so easy to underwrite TAM” Difficulties in evaluating the Addressable Market Segment Five Star’s capabilities Credit a
Slide 44: Robust Proprietary Underwriting (2/2)
Robust Proprietary Underwriting (2/2) Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Multiple levels of appraisal – Final sanction can be provided only by the Independent Credit team Branch Appraisal Credit Appraisal Pre-login assessment by the branch – Basic verification of Fie
Slide 45: Strong on-ground Collections infrastructure (1/2)
Strong on-ground Collections infrastructure (1/2) Five-Star Business Finance Limited | Investor Presentation – Q3FY25 First-time business loan borrowers migrating from informal to formal ecosystem necessitates multiple touchpoints On-ground team Typical Recovery Process at Five Star – Parties involv
Slide 46: Strong on-ground Collections infrastructure (2/2)
Strong on-ground Collections infrastructure (2/2) Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Focus on Unique Customer Collections Efficiency has contributed to significant improvement in portfolio profile Current Portfolio 30+ Portfolio 83.51% 87.39% 16.78% 79.45% 74.17% 76.
Slide 47: Technology Strategy (1/3)
Technology Strategy (1/3) Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Robust investments in technology to efficiently manage the lending process, increase productivity and decrease costs ▪ Manual underwriting process with minimal Till FY2017 technology involvement ▪ Moved to
Slide 48: Technology Strategy (2/3)
Technology Strategy (2/3) Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Comprehensive Tech stack to derive productivity and efficiency benefits Loan Origination & Underwriting Loan Servicing & Support Systems Reporting / MIS Loan Management Collections ML Models Customer Self S
Slide 49: Technology Strategy (3/3)
Technology Strategy (3/3) Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Focused tech strategy / stack have helped achieved key benefits across functional verticals Loan Origination Credit Underwriting Collections ▪ Consistently improving TAT ▪ Fully rounded view of the borrower
Slide 50: Risk Management & Audit (1/2)
Risk Management & Audit (1/2) Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Robust Risk Management and Risk-based Internal Audit Framework ensure strong oversight Board of Directors Risk Management Committee Audit Committee ALCO Credit Committee Business Resource Statutory Audi
Slide 51: Risk Management & Audit (2/2)
Risk Management & Audit (2/2) Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Robust Risk Management and Risk-based Internal Audit Framework ensure strong oversight Risk Management Framework Risk based Internal Audit Framework Credit / Collateral / Portfolio Risk Strong framework
Slide 52: ESG @ Five Star (1/5)
ESG @ Five Star (1/5) Five-Star Business Finance Limited | Investor Presentation – Q3FY25 ESG @ Five Star primarily revolves around the aspects of “S” (Social impact) and “G” (Governance) Business Responsibility and Comprehensive ESG and Comprehensive External Sustainability Report (BRSR) BRSR polic
Slide 53: ESG @ Five Star (2/5)
ESG @ Five Star (2/5) Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Social Impact Indicators – Financial Inclusion (“Reaching the Unreached”) Company Vision Reaching the Unreached through suitable credit solutions Mission Statement Provide appropriate credit solutions to the hi
Slide 54: ESG @ Five Star (3/5)
ESG @ Five Star (3/5) Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Social Impact Indicators – Branch Presence Significant Branch presence in Tier 3 to Tier 6 towns - semi-urban and fast-growing Branch Presence • Significant branch presence in Tier 3 to Tier 6 towns rural geogr
Slide 55: ESG @ Five Star (4/5)
ESG @ Five Star (4/5) Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Strong Governance Framework Board of Directors 1 4 2 1 Promoter Director Independent Directors Executive Directors Non-Executive Director (including 1 Woman Director) Board Risk Management Nomination & Stakehol
Slide 56: ESG @ Five Star (5/5)
ESG @ Five Star (5/5) Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Robust Corporate Governance supported by Board approved Policies The Board of Directors helps improve Corporate visibility, image and governance and provides strong comfort to external stakeholders. The Board a
Slide 57: Strong Human Capital
Strong Human Capital Five-Star Business Finance Limited | Investor Presentation – Q3FY25 Strong & adequate Human Capital for the size and scale of operations Function No of employees Proportion of Headcount – Branch vs HO Business & Collections 7,521 4% - Relationship Officers 6,092 - Branch Manager
Slide 58: Thank You
Five Star Business Finance Limited | Investor Presentation – Q1FY25 Thank You For further information, you may please email to: ir@fivestargroup.in
Five-Star Business Finance — Q3 FY2025 Earnings Presentation on 6ix